Pricing WordPress Plugins (or “The Dangers of The App Store Model”)

When it comes to pricing WordPress plugins, this isn’t exactly new territory. In fact, I’d say when it comes to pricing any online service or product, there are already tried and true ways that prove to be useful given certain scenarios.

It’s basic economics, I suppose.

So this post isn’t so much about various ways to go about pricing WordPress plugins, but what opportunities we have as developers, designers, companies, and so on as the WordPress landscape continues to change.

Pricing WordPress Plugins

There are just a handful of ways that you see WordPress plugins typically priced.

For example:

Freemium. Get the plugin for free, pay for the full product, to unlock features, or to gain access to support (if you consider that a feature).

Transactional. One time purchase.

Subscription. Pay to use the plugin and/or to have access to support at certain intervals be it monthly, bi-annually, or annually.

Sure, there are a few other options, but these are the most popular. And, really, the pricing can vary anywhere between a few bucks up to the hundreds of dollars with each developer or company pricing things as they see fit (which is their prerogative, of course).

But with all of the various pricing models that are possible, with the continued increase in WordPress’ usage both as a CMS and as a foundation for application development, I can’t help but wonder if we won’t see the same thing happen with plugins (and themes, for that matter) that we’ve seen happen in the “app store” landscape of so many other platforms such as Android, iOS, OS X, Steam, and more.

Charging Next To Nothing

As much as I love the “app store” idea that the aforementioned platforms have implemented, I dislike the pricing that has come as a result primarily because of the amount of work that goes into building a product really costs.

There is…

Design

Development

Tetsting

Marketing

Support

Maintenance

…and more.

And then we’ve created this system where we turn around and sell a product, generally using a transactional model, for a couple of dollars hoping to make a living.

15 years ago, software of the same quality – or less, or more, to be fair, I guess – costs ten to twenty times as much (if not more), and it was common to spend the cash on the product. This allows companies to thrive and allows other to make a living continuing to develop and maintain the product, or go on to develop new products.

But now, we’ve got $2.99 applications that are worth far more than that for sale.

I know – competition is what drives the prices down. If there’s a substitute for a given product that costs less than said product, a consumer will likely purchase the substitute. This game then continues until we have software for sale at $0.99.

And perhaps I’m wrong, but that’s ridiculous. That’s not to say that I don’t take advantage of it – we all do – but I’d be just as happy paying $29 for some of my $2.99 applications. This is why when free software that I use includes a ‘donate’ button, I don’t hesitate to click it and pay the developer for his/her time.

They didn’t have to release it for free, and it’s saving me time. But I digress on that, for now.

And Then There’s The WordPress Economy

As I mentioned, as WordPress continues to move forward and more and more developers begin to take advantage of the economy around it, we’re likely to see the same thing happen.

Of course, there are a number of companies who have fantastic plugins that are available and it costs, say, $199 for a license. Some balk at the price; others drop the cash and know that the money is going to support the software they enjoy using.

The thing I’d hate to see happen is the WordPress economy end up going the route of the app stores where all of the products around the core of the application are priced so low that they drastically undermine the time people spent building the product to solve someone else’s problem.

So what’s the solution? This is where I shrug, because I don’t know. Maybe you do.

One way of looking at it is like this:

Imagine you’re a user or a developer and you need a tool or a library to help you get your work done. You typically charge $100. Using said product will save you two hours of time in delivering your project to your client (or to yourself). Therefore, is it worth the $200 of your time?

Technically, yes. But how many people are willing to drop that $200 rather than spend two hours Googling around to try to find a way to do it so not to spend the money?

Or what if you end up using it in multiple projects? That’s two hours multiplied by the number of projects in which you’re using it. Let’s say you use the product in five projects. This translates into 10 hours, or $1000, that you’ve saved because you purchased a $200 product.

Not bad, right?

But something has gotten so warped in our minds – and I do think the app store model is partially, if not mostly, to blame – that we’re willing to cheat our time, our skills, or team members, and, to some degree, our users, in order to sell product at a price so low it’s not really enough off of which to make a living.

How is that rationally justifiable?

Don’t Let The App Store Syndrome Happen To WordPress

But I’m not talking about this. What I’m saying is that I’d hate to see us follow the same models as other app stores where our products require so much time to maintain and support that the price tag we’ve attached to the software doesn’t justify the living (if that’s what you want to call it) that we’re trying to make.

I don’t want to see this happen to WordPress.

The WordPress community is a unique place where it’s not at all uncommon to see competitors hanging out at conferences and exchanging ideas all the while fighting for their share of the market.

So as WordPress continues to grow and the economy around it does as well, let’s do what we can not to drive down the prices of the work we’re doing. It’s good stuff! I don’t care if you’re a competitor or not – build quality software, charge accordingly, and let’s not undermine ourselves or our users.

We’re the ones that have the ability to set those prices. Why would we let ourselves charge so much less?

Related

12 Comments

1) In some ways it already happened long ago – there’s some extraordinary quality plugins (and themes) on WP for nix. I’m guilty of looking first for free plugins. However, this hasn’t impacted the premium market too badly. In fact, you see some of the great free plugins looking for ways to monetize their success.

2) The WP market is quite different to the mobile apps market. There’s a lot of impulse buying in mobile apps, so app devs make a lot of money on folks who may only use their app once or twice.

Even if WP plugins were 99c, I don’t think there’d be a rush on them as people know that there’s a process of implementation and evaluation with plugins. Even when I’m looking at free plugins, I still put a lot of time into research and testing.

We have much greater dependency on and need for plugins working than a 99c game on out phones.

How many 99c apps are used by their purchaser as a vital part of a business? Of the dozens of apps on my phone, not a single one is vital to my business. Anything I can do on my phone, I can do on a computer. (Certainly there’d be some people using business critical apps, but I bet they didn’t pay 99c for them!)

But a plugin? If, a plugin breaks on my website, that is serious and I can’t just send the visitor off to another site.

Of course, if something is 20, 40, 60 bucks or more, you want a safety net. 99c is easy to blow willy-nilly, but not bigger bucks.

99c becomes a threat when users want to evaluate paid plugins and themes. That’s where support and refunds are so important.

So, as well as the vital role of plugins versus the casual use of apps, I think as long as WP plugin devs provide both good support and reasonable refund policies, then the WP market will be protected from the app store model.

And for those still giving away quality plugins for free – yes, we do have to click on thir “Donate” buttons as often as possible. (I don’t do it enough) And we need to pay what we think it’s worth, even if they’re only ask for beer money.

I think the impulse buying is key to why prices fall on app platforms. Another issue is the psychological anchoring that happens when customers see your $40 productivity app next to a $1 fart soundboard. A successful app market that needs to cater to higher priced apps would need to segregate these better.

All of these things would affect a WP-based app store as well, though at a smaller scale.

1) In some ways it already happened long ago – there’s some extraordinary quality plugins (and themes) on WP for nix. I’m guilty of looking first for free plugins. However, this hasn’t impacted the premium market too badly. In fact, you see some of the great free plugins looking for ways to monetize their success.

You’re right – there are some great plugins and themes available for free; however, I always feel like those can pull the plug on support and development at any time because they aren’t obligated to continue maintaining them.

I’ve done this with a couple of plugins for a variety of reasons, but unless it’s a premium plugin or someone is supporting the product, I’m not sure that there’s a reason to continue developing it should they opt to spend their time elsewhere.

2) The WP market is quite different to the mobile apps market. There’s a lot of impulse buying in mobile apps, so app devs make a lot of money on folks who may only use their app once or twice.

Yes and no. There definitely far more impulse buying in the app store because of the accessibility to purchase the product.

WordPress-based products just haven’t reached that level. I’m not sure if they will or if they won’t, but when I see things like AppPresser, I do see it getting there.

Of course, that’s still in the mobile app arena, so the whole point may be moot :).

Of course, if something is 20, 40, 60 bucks or more, you want a safety net. 99c is easy to blow willy-nilly, but not bigger bucks.

99c becomes a threat when users want to evaluate paid plugins and themes. That’s where support and refunds are so important.

Spot on, couldn’t agree more.

And for those still giving away quality plugins for free – yes, we do have to click on their “Donate” buttons as often as possible. (I don’t do it enough) And we need to pay what we think it’s worth, even if they’re only ask for beer money.

I think we need to determine the two markets first: consumer vs business

I think there’s opportunity in both, but consumer is much harder to bust into. It’s easy (easier) to justify pricing of a plugin or theme that is used for business because there’s ROI somewhere along the line.

The scary thing is, look what Apple did yesterday.

The most premium brand in the last 20 years is now going to offer free to destroy competition.

Surprising? Nope.

They did it with music, 3rd party software, now operating systems and essential “life” apps. You command the market, get rich and then give it away to win the long game. Because it’s the data you’re capturing and injecting the customer into your ecosystem that really matters.

Let’s look at it this way (and this is inspiring a new blog post of my own) what if StudioPress, arguably the biggest theme shop, started giving away genesis + child themes with this caveat:

“All your data are belong to us.”

They track your login, analyzes the CONTENT you’re publishing, the visitors coming to your site, frequency and shares. They would know more about your business than — you guessed it — Facebook.

Sure the conservatives would hit the roof and folks would question the practice/ethics — but it’s free. Again, we’re using twitter, gmail, facebook and so on.

And eff it because Prism > all.

*What’s your point you crazy fool?!*

The point is there’s ways to unearth new methods of revenue that aren’t the traditional stream. I think we need to think outside the box and free is a very real threat.

I think we need to determine the two markets first: consumer vs business.

Very true. I was speaking more in general terms, for sure.

The scary thing is, look what Apple did yesterday.

The most premium brand in the last 20 years is now going to offer free to destroy competition.

Surprising? Nope.

Except they’ve always had one philosophy that other software vendors – or OS vendors – haven’t and that’s that software should be one with or work in harmony with hardware.

Giving their software away for free is a way to generate profit by selling hardware.

Perhaps we need to create a WordPressBook ala the Chromebook ;).

But seriously, no – it’s not surprising. This is something that was coming and anyone who has followed Apple for the last, say, 10 years and who was familiar with their philosophy on hardware and software wouldn’t be terribly surprised.

Perhaps the nearest thing that WordPress has is making Theme-specific plugins and creating an entire marketplace around a theme (of course, people have done that with frameworks already).

The point is there’s ways to unearth new methods of revenue that aren’t the traditional stream. I think we need to think outside the box and free is a very real threat.

Yes – we need to think outside the box. But freedom in one economy doesn’t necessarily negatively impact another. WordPress itself is free, but businesses thrive off of building things for it.

OS X is now free (like iOS) and business will thrive building software for it. That’s probably the closest analogy I come to with Apple and WordPress for now :).

And to the Data/Privacy/Prism point – that’s a topic that I won’t even bother going near :).

So I disagree with the premise entirely. The prices aren’t going to be ultimately controlled by plugin developers. Prices are controlled by the buyer and no matter how many people will cosign on to a plea like this, there will always be someone who will go a dollar cheaper. If you are selling on price, commodity selling, then you’re going to be prey to this every time.

Sell on value, sell on benefit, sell on exclusivity. Don’t sell on price. Apple is a hackneyed example, but their stuff isn’t the cheapest on the market or even the best in some cases – but people pay the premium because they perceive value.

I appreciate this comment, Chris, and I actually agree with your points, to a degree.

Prices are controlled by the buyer and no matter how many people will cosign on to a plea like this, there will always be someone who will go a dollar cheaper.

As far as WordPress is concerned, there is truth in this and we can see it with the WooThemes and WP Avengers fiasco (but I digress on going down that rabbit hole).

But I do think that although there will always be people who migrate to things such as the latter option, there are also people who will pay a premium for their particular need primarily because of the “value, benefit, and exclusivity.”

Apple is a hackneyed example, but their stuff isn’t the cheapest on the market or even the best in some cases – but people pay the premium because they perceive value.

if my example of the app store came off as hackneyed, it wasn’t intended to – it’s just that between they, Google, and the Windows app store, there aren’t that many examples from which to pull simply because that type of marketplace is so new (well, relatively speaking).

But you’re right in that the price is on perceived value. But most of the time – at least in my personal experience – the perceived value is legitimate value (and this is coming from true comparisons).

I’m off on a tangent now :).

Bottom line is that I didn’t mean for it to come off as plea in terms of “please, guys, I beg you not to let this happen,” but just that we – as those who are active in the WordPress economy – should be mindful that we could potentially go down this road and we should have it in the forefront of our minds as we push forward.

Apple has their platform locked down. It is very very rare than an app breaks another app. It might even be impossible. A WordPress plugin can however break another plugin or theme. And a theme can break a plugin. And there are many many ways that a plugin or theme can break a WordPress install.

The fact that the WordPress platform is so much more open and hence volatile than the iOS platform makes for higher support costs and makes the micro-transaction model infeasible.

The fact that the WordPress platform is so much more open and hence volatile than the iOS platform makes for higher support costs and makes the micro-transaction model infeasible.

This is a really good point, and I’d not really thought about it like that before. But I agree – this is what makes supporting open source work more time-consuming.

This isn’t to say that support for closed-system applications doesn’t exist – obviously it does – it’s just in a different form. It has less to do with the interaction of the given application and its extensions, add-ons, plugin, whatever with other programs, and likely more to do with the application itself and/or its ability to work (or not work) on the given operating system.

Oh, and my guess is that iOS apps are sandboxed to a degree such that they can’t integrate with other applications without their APIs (thinking of things like Instagram cross-posting to Twitter, for example).